Inventory Errors Video Lessons

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Problem: An understatement of the ending inventory in Year 1, if not corrected, will cause a. Year 1 net income to be understated and Year 2 net income to be overstated. b. Year 1 net income to be overstated and Year 2 net income to be overstated. c. Year 1 net income to be overstated and Year 2 net income will be correct. d. Year 1 net income to be overstated and Year 2 net income to be understated.

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Problem Details

An understatement of the ending inventory in Year 1, if not corrected, will cause

a. Year 1 net income to be understated and Year 2 net income to be overstated.

b. Year 1 net income to be overstated and Year 2 net income to be overstated.

c. Year 1 net income to be overstated and Year 2 net income will be correct.

d. Year 1 net income to be overstated and Year 2 net income to be understated.

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